Rachel Reeves has recklessly spent all the money, leaving Andy Burnham hopping mad. At this rate, she will leave him with nothing to spend.
National Debt Soars
Today, we learned that Britain’s national debt is growing faster than any country in the world, except Botswana. Yet instead of taking control, Reeves wants to borrow and spend even more. She borrowed £24.3 billion in April alone and is set to tap the bond markets for a staggering £140 billion in total this financial year. Soon, UK debt will smash through the £3 trillion barrier. We are on the edge of the abyss. Any sensible government would scramble to balance the books. Not this one. Labour refuses to stop spending.
IMF Warning
Former IMF chief economist Ken Rogoff is urgently warning that unless Reeves gets a grip, Britain will go cap in hand to the International Monetary Fund all over again, just as Labour did in the 1970s. He said Britain faces a “more than 50-50 chance” of a debt crisis by 2030. The humiliation would be unbearable. Even the Bank of England is warning Reeves to change course. She will not.
Bank of England's Concern
Governor Andrew Bailey has said Britain risks a “vicious cycle” of rising borrowing costs that could end in disaster. We already pay £100 billion a year to service the interest on our debts. As the Iran war drives up inflation, that could climb dramatically.
Promises vs. Reality
Reeves was elected on the promise to deliver growth. And it is true that quite a lot of things are growing. Unfortunately, they are the wrong things: tax, inflation, business rates, bankruptcies, job losses, youth unemployment, welfare benefit claims, borrowing costs, the national debt, and the age at which people can afford to retire. Marks & Spencer chairman Archie Norman warned Britain has never looked more “anti-growth”, as red tape and taxes constantly climb. Reeves even risks driving FTSE 100 oil giant BP away by slapping fresh windfall taxes on North Sea producers.
Impact on Businesses
She has also taken a blunderbuss to Britain’s farmers, as well as pubs, restaurants, shops, post offices and small businesses, which are all folding. She has killed growth, and that is a massive problem for Andy Burnham. If I was him, I would not be happy at all.
Burnham's Dilemma
If Burnham wins the Makerfield by-election on June 18, he will go hell for leather to replace Keir Starmer as PM. But then what? The King of the North only has one plan, and it is the same one Rachel Reeves had: borrow more, tax more and spend more, until the IMF steps in. It did not work for her, and it certainly will not work for him. Because there is no money left. There never is under Labour.
No Room for Error
Britain cannot keep borrowing. The bond markets will not allow it. And if Labour pushes taxes even higher, the IMF says growth could dry up altogether. The economy has already taken about as much fiscal punishment as it can stand. If Burnham cannot borrow and cannot tax more, then he cannot spend more either. And since that is the only thing he wants to do, he will not be able to do anything. He will be doomed even before he begins.
Of course, that is his fault. He should have come up with a strategy, but has not. But he will not be happy at Reeves for spending all the money before he had a chance to spend it all himself. Burnham and Reeves will sink together, and it will serve them right. Unfortunately, these two financial incompetents will drag the rest of us down with them.
